Paul Volcker, Still MIA

I want to point out something Matt Taibbi just wrote about the fact that Paul Volcker is still isolated from the Obama economics team (my underline):

Paul Volcker, the former Federal Reserve chairman who’s an economic adviser to U.S. President Barack Obama, today renewed his call for a limit on the activities of banks that are considered “too big to fail.” [bloomberg]….

This would be meaningful if the Economic Recovery Board that Volcker runs for Obama were actually a chief policymaking center for the president. But the reality is that the Volcker group is a kind of show-pony the Obama administration kept on…The transition was instead led by people like Citigroup’s Bob Rubin, Rubin’s son Jamie, Citi exec Michael Froman (whom you might recall actually accepted a $2.2. million bonus from Citi after he was hired by the White House, and in the middle of Citi’s bailout negotiations), Larry Summers, and Tim Geithner. It’s those people who are running the economic show in the Obama White House.

There is a larger story to be done about how Obama did a bit of a bait-and-switch, hiring progressives to run his campaign and jettisoning them once he got into office. I hear about this phenomenon from different corners of the policymaking universe, from health care to defense and intelligence spending. But my sense is that the switch was most violent in the realm of economic policy, which means stuff like this bears particular attention. Will Obama act on Volcker’s recommendations? We should probably wait and see, but I’m not holding my breath.

That doesn’t quite capture what is sad about it though; I understand the idea of progressives in the veal pen when it comes to the Obama adminstration, but this is Paul Volcker. He’s not ACORN. He’s not Van Jones. He’s a former Fed Chairman. (Though it would be amusing for Glenn Beck to go after him.) When I last mentioned this issue, note how positive the Volcker regard was at the Seeking Alpha comments and how disappoint everyone was that he’s shut out.

I completely agree it is a total shame that Volcker doesn’t have better access, or isn’t more influential, with how the recovery is going. Here is me in May 2008, quite happy that Volcker had endorsed the Obama team – it may have meant little to you, but the finance community noticed. It was a serious member of the financial establishment who wasn’t a Wall Street banker. He signed up after Bear but before Lehman, so at the point where we knew we had some serious financial worries in the pipeline for Obama if he won.

If I wanted Rubin and Summers to be running the financial crisis I would have donated money and volunteered for Hillary instead. At the time I thought the fact that Volcker and Warren Buffett were brought out during the campaign was a sign of things to come. The transition to the crew we have now has been disappointing to say the least.

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One Response to Paul Volcker, Still MIA

  1. Such intense devotion to the top 1 percent of the citizenry has proven to be a major bust for the economy. At some point, the power brokers in DC and on Wall Street will need to realize that they’ve broken the back of the middle class and the nation’s ability to succeed is equally broken.

    Allowing our financial system to continue unchanged is astonishingly dangerous – (witness the tumultuous events of the last year).

    Keeping the status quo is not the the change we need.

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